Halliburton sues retirees who griped about benefits

Published 5:30 am, Saturday, July 31, 2004

When Halliburton announced in November that it would stop providing health insurance for its retirees who are eligible for Medicare, some got upset.

Three wrote the company complaining about the change that's scheduled to take effect Jan. 1 and promptly got sued — by Halliburton.

"I was flabbergasted," said Paul Bryant, one the three complaining executives and a former vice president of human resources for Halliburton until he retired in 1999.

The fact that Halliburton is dropping health benefits for its retirees in favor of Medicare is nothing new in today's business world.

That they were sued for complaining is relatively new.

Halliburton must have figured the retirees would eventually sue and made a pre-emptive strike, said Joe Ahmad, an employment lawyer with Ahmad, Zavitsanos & Anaipakos in Houston.

It's an unusual tactic in an employment case, said Ahmad, who is not involved in the dispute. But by suing first, Halliburton can choose where the case is filed and will have a chance to present its case first.

"A lot of times, you can win before the other side can even speak," Ahmad said.

Three-year provision

At issue is whether the 1998 merger agreement between Halliburton and Dresser Industries required Halliburton to keep paying benefits to its 4,000 salaried retirees. The three former executives contend that it did.

The 58-year-old Bryant, himself a former Dresser employee, was on the negotiating committee for the merger. And as the head of human resources, he made presentations to employees about the effects of the merger and remembers telling them that the merger agreement provided lifetime retiree health care.

In addition to Bryant, Halliburton also sued James Graves, former senior vice president of corporate planning, and Phil Griffin, former president of Dresser's SWACO division.

In its Jan. 21 lawsuit, Halliburton argues it spelled out repeatedly in plan documents that it retained the right to change or terminate its health insurance plans.

And it promised to retain benefits for just three years in its merger agreement with Dresser, according to the lawsuit that was filed by Baker Botts attorney B. Daryl Bristow.

David Beck, a trial lawyer with Beck, Redden & Secrest who is representing the retired employees, said the three-year time limit refers to the benefits provided to current employees but not to retirees.

"They're trying to take the three-year limitation on one provision and apply it to another," Beck said. "But if the provision in dispute was intended to be limited to just three years, it would have said it was limited to just three years."

Class-action request

Halliburton spokeswoman
Zelma Branch
commented by e-mail that the
Halliburton Company
Benefits Committee filed the suit "to provide prompt resolution concerning the validity of the program amendments so that the program participants could arrange for other medical coverage, above what they receive through Medicare, if desired."

"Halliburton strives to provide competitive benefits packages to its employees and retirees and also to treat similarly situated employees fairly and equally," Branch wrote.

The retirees and officials from Halliburton will ask U.S. District Judge Lynn Hughes on Aug. 16 to certify the case as a class action.

Halliburton is picking up the tab for the retirees. Federal law requires a company that sues its employees over benefits to pay its employees' legal bills.

"Halliburton did not want to impose upon its retirees the costs associated with a class-action lawsuit," Branch wrote. "Payment of those costs ensures that the retirees can retain excellent legal counsel to assist in achieving a full and fair resolution of the case."